MicroRNA-221-3p (miR-221-3p) is an important regulator involved in the progression and prognosis of various cancers. In this study, we aimed to investigate the diagnostic and prognostic value of miR-221-3p expression along with long non-coding RNA X-inactive specific transcript (XIST), which was identified as its upstream regulator in hepatocellular carcinoma (HCC) by bioinformatics analysis, and further validated by RNA immunoprecipitation (RIP) and dual-luciferase reporter assays. Their expression was measured in tumor tissues and corresponding non-tumor tissues by quantitative real-time PCR (qRT-PCR), which revealed that XIST was weakly expressed in HCC cells and tumors, while miR-221-3p was overexpressed. Complete knockdown of XIST enhanced HCC cell proliferation and migration and inhibited apoptosis, as observed by MTT, transwell, and flow cytometry experiments, respectively. Animal studies validated that XIST knockdown induces tumor growth . In contrast, upregulation of XIST in HCC cells suppressed their proliferation and migration, stimulated apoptosis, and retarded the growth rate of tumors . These effects were partially reversed by upregulating miR-221-3p expression. Furthermore, we demonstrated that O-methylguanine-DNA methyltransferase (MGMT) is a downstream target of miR-221-3p. It was weakly expressed in HCC cells and tumors and showed a negative correlation with miR-221-3p. Forced MGMT expression repressed proliferation and migration and enhanced apoptosis in HCC cells. Nevertheless, these anti-tumor effects induced by MGMT overexpression could be abolished by miR-221-3p upregulation. Collectively, our findings reveal that XIST blocks the development of HCC through miR-221-3p-targeted regulation of MGMT. This reveals a new mechanism involved in the development of HCC.